The Labor Department reported this morning that the economy added 157,000 jobs in January, down sharply from November and December. Revised hiring figures show the economy added 247k and 196k jobs, respectively in the final two months of 2012. The apparent slowdown in hiring is consistent with this week’s report that GDP contracted in the 4th Quarter.
January’s jobs number is about break-even with population. The economy generally needs to add 150-200k jobs a month to keep pace with population growth. As a result, the unemployment rate moved up to 7.9%.
The rest of the job report shows general stagnation in the economy. Average hourly earnings were up just 0.2% for the month, down from December’s growth of 0.3%. Average workweek was unchanged at 34.3 hours. Average manufacturing hours fell slightly.
The big upward revisions in hiring for November and December underscore the weak foundation of the economy. Hiring was stronger than originally estimated, yet the economy remained, at best, on pause, with GDP contracting 0.1% at the end of the year.
January’s hiring is far below the average monthly gains in 2012, when the economy added 181k jobs, on average, each month. 2013 begins with a number of head-winds for the economy, particularly tax hikes and the looming implementation of ObamaCare.
Today’s report is not an auspicious start to the year.